Regulators Approve Merrill Lynch Sale

Federal antitrust regulators on Wednesday cleared Bank of America's $34.9 billion purchase of Merrill Lynch & Co. Inc.

The deal, announced Sept. 15, is part of the rapid restructuring of the U.S. financial system amid the global credit crisis. Merrill agreed to be bought by Charlotte, N.C.-based Bank of America Corp. just days after rival investment bank Lehman Brothers filed for bankruptcy protection.

The Federal Trade Commission said that antitrust regulators at the Justice Department had completed their review of the deal.

The purchase combines the largest U.S. bank by deposits with the world's largest brokerage and must still be approved by the Federal Reserve. Bank of America said last month it hopes to close the deal in the first quarter of 2009.

The all-stock transaction was originally valued at $50 billion, but Bank of America's shares have declined since then.

Under terms of the deal, Bank of America would exchange 0.8595 shares of its stock for each Merrill Lynch common share.

Based on Bank of America's Tuesday closing price of $26.53, that values New York City-based Merrill at $22.80 per share, a 7 percent premium to its Tuesday closing price.

Both banks are slated to receive billions of dollars in capital from the federal government under the plan announced Tuesday to inject $125 billion into the nation's nine largest banks and $250 billion into the overall banking industry.

Shares of Bank of America fell 83 cents, or 3.1 percent, to $25.70 in Wednesday morning trading, while Merrill fell $1.28, or 6 percent, to $20.07, amid a broad market decline.